ENTREP (1st Quarter) - REVIEWER NI AD PDF

073124 Entrepreneur - Person who sets up a business with the aim of making a profit and creates a new business, bearing the most of the risks and enjoying most of the rewards - Came from the French word ‘Entreprendre’ which means “to undertake” - Innovator (able to create/innovate an...

073124 Entrepreneur - Person who sets up a business with the aim of making a profit and creates a new business, bearing the most of the risks and enjoying most of the rewards - Came from the French word ‘Entreprendre’ which means “to undertake” - Innovator (able to create/innovate an idea; adopt what are the needs of the consumer) Entrepreneurship - The acts of creating a business or businesses while building and scaling it to generate a profit. - An important driver of economic growth and innovation. - the act / process of creating (important driver to start a business) Principles/Common Competencies: 1. Decisive - decides quickly; produces a definite idea or result. 2. Communicator - seek ways on how to promote their product; has the power to convince; 3. Leader - serves as the brain or powerhouse of the business. You are said to be a good leader if your employees are able to do something without your control (they already know what to do because you already taught them.) 4. Opportunity seeker - “An entrepreneur doesn’t wait for opportunities but rather seek them.” - You must find ways on what to do on your product knowing that you have competitors; thinking of something unique. 5. Pro-active - anticipating problems that may come in the future. You must be ready and think ahead of the possible issues and plan what to do incase that happens. 6. Risk-taker - doesn’t back out; brave enough and able to withstand. You started a business without knowing anything about what it will be in the future (would it be successful or not?) 7. Innovative - you must think out of the box. Think about something unique about your business so that consumers will buy from you. Core Competencies: 1. Economic & Dynamic Activity - must be able to adapt changes (join the trend nowadays) 2. Innovative - (same lang sa taas) 3. Profit Potential - must think how this will compensate you. (dapat may makukuha ka na profit) 4. Risk Bearing - being wise. able to withstand any problems that may come in your way; identifies the potential risks of the business. 080124 Importance to Filipino People Provides guidelines in their wealth-creating ventures. Helps improve their financial and social life. - As entrepreneurs, they will need other investors, and for them to be able to collaborate, they need to communicate which can improve their socialization with other people. Helps broaden their creativity - By thinking outside of the box; being innovative. Helps make their life happy, fruitful, and successful. - Once their business became successful for being productive, they will feel happy and being financially stable it will not be a problem in everyday life. Importance to Local Community Provides employment in the community. - Everyone can be an entrepreneur in their own way and this act will help other people to be employed. Creates new demand in the market - For example, there is a specific product that can only be bought in the city which is 2 rides from your town. You decided to establish a business with that specific product so that the people in your town will now buy from you and will not go to the city anymore. Make substantial contributions to the raising and collection of taxes. - Aside from paying taxes, this will contribute not only to the government but also the projects like infrastructure, bridges, etc. Facilitates the movement of the factors of production - Manpower - Raw materials (you buy from them as you need it for your business but at the same time you are helping them to continue their business) Creates new business opportunities - You are helping other people to start their business - For example, there is a shopping mall and you’ve decided to establish a carinderia with low and affordable prices near that area thinking that the employees that are working inside that mall can’t afford meals in every fast food chain for their everyday living. Promotes a peaceful and loving community - An entrepreneur must be open-minded when it comes to other competitors. It increases constructive competition - If there is only one store in that area that sells bicycles, the price would be high. But if there is another store that also sells the same product, there will be at least or no change in the prices. (there is a competing price) Importance to Philippine Economy Encourages competitiveness - The more entrepreneurs, the more competitive they will be.  Helps find an entrepreneurial niche in the world market - If other nationality needs something and it can be only found in your specific country, they will order from you which will help your business and at the same time it will benefit your country. Helps hasten the economic recovery process of the Philippines during financial turmoil. - By observing the pandemic, the economy of the Philippines dropped. But many people became entrepreneurs by selling online and making other people buy from them. Facilitates the smooth flow of money in the local market. - If your business goes well, there will be a smooth flow of money that will come to you and will make you continue your business. Assist the national government in its desire to have favorable economic ratings in the world. - Almost just the same with the description under: Make substantial contributions to the raising and collection of taxes. 080624 Entrepreneurship vs. Ordinary Small Business Entrepreneurship Ordinary Small Business Motive in opening a business To become successful For source of Concept and livelihood/daily needs principles (for the (it serves as major good of the provider for financial community/environme requirements) nt) Ex. minana mo ang business ng lolo mo and you have no plans in improving it) Perception of risk in the Taking the risk Deterrent of the business Consider as inherent operation in the business (if there are plans in (not willing to take the risk as improving it) this may affect their source of living, like what if hindi maging successful, saan na sila kukuha ng funds) Reactions to changes in the Reacts positively Remains passive and environment Brings new ideas for static (sarili lang entrepreneurial iniisip) opportunities  (collaboration with other companies, like food panda) View on competition Healthy economic Unhealthy element in environment (helps the business other entrepreneurs to environment (ayaw improve) malamangan) Vision for development and Outline the Relies upon chance growth entrepreneurial and luck in venture (has a clear maintaining the vision towards their business (mga business; being pampaswerte and proactive) other paniniwala) Horizon of business operation Think globally but acts Centered on the locally (thinking about community level (bare something for the minimum kasi for good of outer living lang naman ang community) goal) Sources of business funds Explore ways to Personal funds generate much-needed funds from internal and external resources (for example, loans, they are not afraid as they know to themselves that they can pay it later) 080724 Types of Entrepreneur 1. Innovative - Make new things by thinking new ideas; creates new product 2. Imitating - Don’t create new things but only follow the ideas of other entrepreneurs. 3. Fabian - They are skeptical about changes to be made in the organization they don’t initiate but follow only after they are satisfied. (they are known as careful entrepreneurs - pag alam nilang patok ang isang product, saka lang) 4. Drone - They are those who live on the labor of others.  - They are die-hard conservatives even ready to suffer the loss of business. (aka as traditional entrepreneurs - hindi nila inaadapt ang changes e.g. bakery) 5. Social - They are those who initiate changes and drive social innovation and transformation in the various fields such as education, health, human rights, environment, and enterprise development. (e.g. private hospitals, review centers) 080924 Job Opportunity - A chance for someone to work and earn money by doing a specific task of role for a company or organization. - For employment; for survival (not align sa course mo) Career - A long-term profession journey you may determine based on your passions. - It is a path you embark upon to fulfill your professional goals and ambitions. Career Opportunity - Specific chance or situation within your career path. - Chance to do a job that can lead to better jobs in the future and help you progress on your career path. - Involves development and goals - Align siya sa course mo Career Opportunity for Entrepreneurship 1. Consultant/Advisor - Must have enough knowledge to advise someone in your specific field. 2. E-commerce Entrepreneur - Buy and sell products online - Usage of internet 3. Venture capitalists/Investor - Investing on a specific field (e.g. in engineering - construction site) 4. Content creator / Influencer - Like sa tiktok; endorsements 5. Educational entrepreneurs - Teachers in a review center (they are sharing their knowledge to students and at the same time they are gaining money.) 081324 Market - Refers not only to the place but always to the commodity and the buyers and sellers who are in a direct competition with one another. Market Need - Something that people want (desire) - Recognizing what customers are looking for/what problems they need solution for Potential Market - Group of people who might be interested in buying a specific product or service - Figuring out who could be your customers (potential buyers) Market Potential - How much business you could potentially do in a specific field - Estimating the total sales/demand for your product/service if everything goes well Market Sizing - The process of estimating the potential market for a product in terms of its sales and revenue, number of customers or other relevant metrics. Target Market (Target Audience) - Referred to specific group of customers that the business aims to reach by their product. Common types of market size: 1. Total Addressable Market (TAM) - represents the total demand for what you’re selling; it’s the entire market that exists for a particular product or service. 2. Serviceable Available Market (SAM) - it’s the portion of the total market that you can realistically reach or serve; factors geography, demographics and other limitations that might make it impossible to reach the entire TAM. 3. Serviceable Obtainable Market (SOM) - part of the market that you realistically capture; given your resources and competition. Example: Situation: A school supplies store in Panal near TNHS and TNWCS. TAM - teachers, students, construction workers SAM - people who needs school supplies SOM - people who are able to pay or can afford your pricing. Methods in Identifying the Market Needs: a. Focus groups - is a market research method that brings together 6-10 people in a room to provide feedback regarding a product, service, concept, or marketing campaign. (this is conducted to identify the problem/concerns) b. Social listening - is the process of identifying and assessing what is being said about a company, individual, product or brand on the internet. (ex. Reviews on an online store - shopee, lazada) c. Keyword Research - is the process by which you search terms people type into search engines like Google, and include then strategically in your content so that your constant appears higher on a search engine results page. (identifying the common searches of people) Importance of Market Sizing: 1. To estimate how much profit, they could potentially earn from a new business or product. (profit potential) 2. To develop a marketing strategy that addresses the unique needs and potential core market. (pro-active) 3. Help you estimate the number of people that you may need to hire before you launch a new product or service. (typically, among filipino people, they hire many employees even though their business is just in the beginning phase which might lead them into trouble. Like hindi iniisip pano yung profit ng business and you ipapangsalary sa employees tapos what if may times na hindi patok yung product) 081424 Product - anything that we can offer to a market for attention, acquisition, use or consumption that could satisfy a need or want. - Can be a goods or service. Goods Service Goods are materials that can be seen, Services are amenities, facilities, or benefits, touched or felt and more ready for sale to provided by the other people. customers. Tangible Intangible Ownership can be transferred Ownership cannot be transferred Can be stored for future use (pwede iuwi) Cannot be stored. (dai man daa pwede iuli su poging doctor)  Goods needs or Service Needs: 1. Office supplies - GN 2. Research and encoding shop - SN 3. Foods (biscuits, candies, and drinks) - GN 4. Photocopy - GN 5. PE uniform - GN 6. Custom Tailoring - SN 7. Haircuts/Hair Styling - SN Types of Market Needs Goods Needs ○ Price - markets generally set their budget for any goods purchase. (how much is the cost?) ○ Features - markets look for features that would solve their problem and reliability in functioning while using the product (what the product can do) ○ Effectiveness - the product must be useful in streamlining the process to save time. (does it solve or satisfy the needs of the buyer?) Service Needs: ○ Empathy - market sticks to brands that serve them with an empathetic attitude. (professionalism; able to feel what the customer is feeling; able to understand) ○ Clarity - market looks for transparent information from the brand related to pricing, refund, policy, etc. ○ Communication - the market needs information from the point of interaction until the end. (updates; follow up questions) 081624 Factors to consider in Screening the Proposed Solution/s 1. Viability - is defined as the ability to survive or persist; the quality of being able to happen or having a reasonable chance of success. ★ 3 Areas Need to Consider: 1. Objective - Guide/way to your business; must have a clear mission and vision in preparing a solution. ➔ Mission - purpose (why will you make this product/business) ➔ Vision - what do you want your business to look like in the future. 2. Manpower or human source - Planned number of employees to hire - Consider them to be motivated, have skills, and have knowledge that will help you reach your goal in the future. 3. Management must capitalize in the use of new technology - To be more effective; sabayan dapat ang trend ★ Things to Test-Check Business Viability of New Venture Idea 1. Uniqueness - How your business/product will stand out among your competitors - You don’t have to be innovative, as long as you are able to sustain/solve the needs of the market and you’ll enhance it. 2. Financing the venture - Where will you get money? ➔ Internal - short-term (within 1 year of payment) e.g. cash-on-hand, income, investment, personal properties ➔ External - long-term (more than 1 year of payment) 3. Customer - It is not possible for your business to go on if you don’t have customers. That's why it is important to identify your target market. 4. Competition - You must be able to compete with others. - How? Your product must stand out compared to others 081924 5. Economic Need - If the economic is weak = people are in the phase of thinking to not buy - If the economic is good = people will buy  - Ano ba nasa isip ng mga tao/yung mga need nila? (for example: pandemic era - nagsilabasan mga face mask) 6. Timing - Choosing the right moment to lauch your product - Example: hindi ka naman magbebenta ng parol pag february ( - Ashley) 7. Marketing of goods and services - Different marketing strategies (advertisements, banners, flyers) 8. Continuing cash flow - Must have a proper financial plan to provide your needs in making a product. 9. Basic feasibility - Realistic - You must know that you can do what your plan is. - Legal (FDA and DTI approved) - Following the government requirements 082024 2. Profitability - is a business ability to gain profit from its business activities and investment. ★ To measure profitability, we use: 1. Payback Period - refers to allotted time, usually numbers of years that an investment is recovered. Payback Period = Initial Investment or Capital / Profit 2. Return of Investment (ROI) - also called Return on Assets is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of an investment or compare the efficiency of a number of different investments; profit sa pagcreate ng product. ROI = Net Income or Profit / Cost of Investment or Capital x 100% 3. Return of Sales (ROS) - also called Net Profit Margin measures the overall operating results of an entity; profit sa pagcreate plus operating expenses (electricity, manpower) Profit is what is left of the business revenue, income or sales after it pays all expenses. ROS = Operating Profit / Net Sales x 100% * Operating Profit = Net Sales - Operating Expense Example: Ken lost his job because of the pandemic and he wanted to earn some money. On March 16, 202 he decided to make frozen lumpiang shanghai to sell online. His initial capital in starting his business is P640.00. Upon posting it online, all lumpia were sold. More friends ordered and recommended his lumpia so he decided to make a business out of it. Below is a record of the result of his business transactions for 5 days. Let us check if he gained profit or not. DAY GROSS COST OF NET SALES OPERATING NET SALES GOODS (GROSS EXPENSE INCOME / SOLD SALES - NET PROFIT COGS) (NET SALES - OPERATING EXP) 1 200 pcs. X 500.00 500.00 140.00 360.00 5.00 = 1,000.00 2 300 pcs. X 800.00 700.00 250.00 450.00 5.00 = 1,500.00 3 350 pcs. X 1,250.00 500.00 500.00 0 5.00 = 1,750.00 4 250 pcs. X 550.00 700.00 200.00 500.00 5.00 = 1,250.00 5 320 pcs. X 800.00 800.00 250.00 550. 5.00 = 1,600.00 Total 7,100.00 3,900.00 3200.00 1,340.00 1860.00 Break-even happens when there is no profit nor loss after deducting expenses from revenue. Profit = Expense Payback Period = 640/360 = 1.7 or 2 days ROI = 1,860/3,900 x 100% = 0.48 x 100% = 48% ROS = 1,860 / 3,200 X 100% = 0.58 X 100% = 58% A business is said to be not profitable if it results into a negative percentage in computing the ROI and ROS 082724 3. Customer Requirement - specification that must be present in a product; desire of customer ★ 2 types: 1. Service/Intangible Requirement - intangible aspects of purchasing a product that a customer expects to be fulfilled. - Aspects of how a customer expects to be treated while purchasing a product and how smooth this buying process goes. 3 main attributes in service needs: 1. Empathy 2. Clarity 3. communication 2. Output/Tangible Requirement - These are mostly the tangible characteristics, features or specifications that a consumer expects to be fulfilled in the product. 3 main attributes in goods needs: 1. Price 2. Features 3. Effectiveness ★ 3 levels of customer requirements: 1. Must haves/Expected - It is the basic requirement expected by the market that will be appreciated if fulfilled. - Essential things a product must have Example: in restaurant - food, chef, utensils, chairs & table, washing area, cashier, cleanliness, poging waiter (joke) 2. Satisfiers - There are the requirements that customers express their desire for, explicitly. If you offer better or more of these satisfiers, then the customers will appreciate it more and will be more satisfied. Example: good ambiance, speed of serving, hospitable waiters, delicious food, affordable price 3. Delighters/Beyond expectation - These are the bonus, extras, or add-ons to the product requirements. Example: free foods, free taste 082824 SWOT Analysis - Method people often use to decide which the most suitable business idea - It helps you focus on possible problem areas and potential advantages of each idea. ★ 2 factors of SWOT Analysis: 1. Internal - controllable 2. External - uncontrollable Internal: 1. Strengths - Positive aspects of company Example: marketing strategy, coordination, quality of products, well-motivated employees, new technologies, brand name, investors and shareholders, well-organized, popularity 2. Weakness - Need for improvement - Kabaliktaran ng strengths Example: poor quality of product, out-dated equipments, demoralized employees External: 3. Opportunities Example: market trends, social media 4. Threats - Possible problem in the future Example: new competitors, supply of raw materials, inflation, disaster, new market demands, economic turmoil ★ Importance of SWOT Analysis Help entrepreneur either to overcome or to minimize the problem Help make strategic plan for the future Help to plan and be creative, open-minded to different suggestions. 090424 Marketing Mix - Set of controllable and connected variables that a company gathers to satisfy a customer better than its competitor. It is also known as the “Ps” in marketing - Serves as the recipe that is used to attract customers Why is the marketing mix related or connected to the 7P’s?  Since the marketing mix is referred to as the recipe, 7P’s is referred to as the ingredients - the needs. The 7P’s 4 P’s of Marketing 1. Product 2. Place 3. Price 4. Promotion Additional P’s in the 7P’s 5. People 6. Packaging 7. Positioning 1. Product - anything that we can offer to the market; goods or services 3 Levels of Product a. Core Product - this is the basic thing that customers really need or want. It’s the main benefit or purpose of the product; purpose Example: cellphone - good quality of camera, storage, processor b. Actual Product - this includes the physical product itself and the features that make it unique. It’s what customers can see, touch and use; features (color, brand) Example: cellphone itself, packaging c. Augmented Product - these are the extra things that come with the product to make it more appealing or convenient. It’s the additional vale beyond the basic function Example: warranty, freebies Example Situation for Service Needs: Laundry a. To wash the clothes b. Service itself c. Free fold, iron 4 General Types of Products a. Breakthrough Product - something entirely new or innovative that changes the way people do things or solves a problem in a revolutionary; product of innovative entrepreneurs. b. Differentiated Product - one that offers unique features / qualities that set it apart from similar product in the market; product of imitating entrepreneurs  c. Copycat Product - one that imitates / copies the features, design, or functionality of an existing product; product of fabian entrepreneurs. d. Niche Product - designed for a specific, often smaller, group of customers with unique needs / preferences; few customers. 2 Main Types of Product Description a. Product for people who want to use it. - Benefits to the customer b. Process description - How it was produced, how to apply/use, what are the ingredients used 2. Place - Represents the location where the buyer and seller exchanges goods or services - Also called as the distribution channel. Stages of Distribution Channel 1. Producer → Wholesaler → Retailer → Consumer 2. Producer → Retailer → Consumer 3. Producer → Consumer Advantages and Disadvantages of Stages of Distribution Channel: It is cheaper if you will buy directly to the producer Consumers can increase the income of small business owners Hassle for a consumer to go directly to the producer especially if it’s located far away If the product will undergo many stops, it is more expensive/pricey Benefits of a Very Good / Strategic Location 1. Attract lots of customers - If you are located at the most go to places of customers 2. Helps improve sales 3. Attract new customers 4. Maintain loyal customers - They’ll become convenient buying from you 5. Get to know your customers better - Once the seller got closed to the customer, the customer can open-up to the seller by giving feedbacks and advices to improve the product 090924 Government services - tax Services of employee - wages/salary Services of a physician - fee Education - commission Use of money - interest Service of guest speaker - honorarium Use of copyright - royalties Transportation - fare Highway - toll Use of asset - rent - price 3. Price - Price refers to the amount money paid by the customer to the selling firm so the customer can use the product - It is the value of a thing or service that is expressed in terms of money 4 Types of Pricing 1. Competitive Pricing - this kind of pricing policy is based on competitors’ prices. Reason for using this: consumers will be less likely to move from your brand / choose your competitors products over your own. Main Types: 1. Low Price - lower than the competitors. Purpose: to attract more customers 2. High Price - higher than the competitors. Purpose: customers will think that if one item has a higher price, it has a great / good quality than the cheaper priced item. 3. Matched Price - same as the competitors. Purpose: to stay competitive 2. Cost-Plus Pricing - management determines first the cost of the goods and incidental expenses, and finally adds its desired profit percentage to arrive at the selling price; this methods is simple and straightforward; also called as Mark-up Pricing\ Reason for using this: ensures that the full cost of creating the product / fulfilling the service is covered. How to compute: (Materials + Labor + Overhead Cost) x (1 + Mark Up) Example: Material Cost = Php 50.00 Labor Cost = Php 30.00 Overhead Cost = Php 20.00 Mark-up Percentage = 25% Selling Price = (50 + 30 + 20) x (1 + 25%) (100) x 1.25 Selling Price = 125 ABC produces custom-made bag. The company uses a cost-plus pricing strategy to determine the selling price of its products. Data: Material Cost = 150 Labor Cost = 100  Overhead Cost = 50 Mark-up percentage = 35% Selling Price = (150 + 100 + 50) x (1 + 35%) (300) x (1.35) Selling Price = 400 Mark-Up - refers to the value that adds to the cost price of a product. 3. Value-based Pricing - setting prices based on a consumer’s perceived value of a product or service; customer-focuses, meaning companies base their pricing on how much the customer believes a product is worth. Reason for using this: to charge more when your product is really special or valuable to customers. It helps you get paid for the extra benefits your product offers and can lead to higher profits because customers are willing to pay more for something they find valuable. Example: luxury bags, jewelries, medicines 4. Demand based Pricing - the process of calculating price on the basis of the relative demand for the product, as evidenced by the elasticity of demand characteristics of the product; demand pricing is the most customer-orientated form of pricing since it derives entirely from consumer demand; also called as customer-based pricing. Reason for using this: to make more money when lots of people want your product. Example: face mask during pandemic Common types: 1. Geo-based Pricing - means setting different prices for the same product or service in different locations, based on where your customers are. (e.g. water - sa ibang lugar need siya pero since diit ang supply, halangkaw ang price. Compared sa mga may access sa tubig, mura siya o kaya minsan libre pa) 2. Price Skimming - charging a high price for a new product and then gradually lower it over time. (e.g. gadgets) 3. Yield Management - about changing prices based on how full or busy your business is to maximize revenue PRICING SCHEMES 1. Product bundle pricing - individual products are put together to create one whole bundle or set which is then offered to customers. Examples: rejuvenating set, school supplies, mix and match sa jollibee/mcdo 2. Main or Captive Pricing - the main product is charged lower price but additional charges go with it. Examples: instax (needs film), printer (needs ink) 3. Product Line Pricing - involves the separation of goods and their variations into categories by creating price gaps to emphasize differences in quality.  Examples: phone (because of specs), pizza 4. Market Penetration Pricing - a low initial price is set to attract customers, improve sales, and eventually eliminate competition. 5. Market Skimming - involves setting a high price for a product to gain as much profit as possible before the number of competitors for the same product increases. Example: wine (mas nagmamahal pag mas haloy)